The hard-hitting report comes despite Australian natural gas production levels hitting record highs over the past 12 months.
Speaking at the Australian Domestic Gas Outlook (ADGO) conference in Sydney last week, EnergyQuest CEO Dr Graeme Bethune said that the total number of exploration and development oil and gas wells drilled in Australia halved, falling from 1,535 in 2014 to 821 in 2015, including exploration wells falling from 119 to 54.
“In that time, exploration spending fell from $1,304 million in Q4 2014 to $446 million in Q4 2014,”? said Dr Bethune.
“This is Australia’s lowest oil exploration spend in a decade.”?
Looking to the Bight
In his presentation Dr Bethune indicated that it was well overdue for exploration to begin in the Great Australian Bight.
“To make matters even more difficult, some politicians are intent on killing what little oil and gas exploration activity there is, with Senate inquiries now into unconventional gas as well as proposed oil and gas exploration in the Great Australian Bight,”? said Dr Bethune.
“Australia is estimated to have only produced 76 million barrels of oil in 2015, the lowest since 1970 – yet exploration in the Bight provides the best chance of finding the new oil basin that Australia badly needs.”?
Despite the gloomy forecast, EnergyQuest noted that there is some good news for the oil sector, with Australian LNG export revenue growing quickly.
Gross Australian LNG production in 2015 was 30.4 million tonnes (Mt) – an increase of 23.5 per cent year-on-year and up 48.3 per cent at 9.1 Mt in the final quarter.
EnergyQuest forecast in its March quarterly that it estimated a southern supply gap of around 80 petajoules (PJ) in 2020, increasing to ~170PJ just five years later in 2025.
EnergyQuest also noted a second area with a positive outlook – Queensland’s development drilling.
“This region will need to maintain production to fuel the LNG projects,”? Dr Bethune said.
“Drilling there fell from 1,173 wells in 2014 to 612 wells in 2015. This was a natural consequence of the initial need to drill, discover and develop maiden gas flows for the commissioning cycles for the new LNG plants – but substantial numbers of additional development wells are still needed now as the plants move to long-term output.”?